You Want to Justify a CX Investment? Forget the Scorecards

You Want to Justify a CX Investment? Forget the Scorecards

INSIGHTS
You Want to Justify a CX Investment? Forget the Scorecards
INSIGHTS

You Want to Justify a CX investment? Forget the Scorecards

Your CEO and leadership team don’t decide based on numbers

Heidi’s story is not just for children.

Heidi is close to the end of what she hopes is the best and most persuasive presentation she has made in her life. She is head of customer experience for a major Swiss bank and is in front of the leadership team in Zurich. Other than her manager’s manager, she has never met anyone in the room before.

She has spent two solid weeks doing nothing but preparing all of the data and resulting insights. They’re about the e-Banking platform that was launched 15 months earlier. Some of the conclusions are surprising, others less so.

She is about to show the slide with the top two customer improvement suggestions. It includes her request for two project managers and the time of three software people to address the suggestions. She also has a last slide comparing customer views of the bank’s offering with that of competitors.

Heidi is 35 minutes into her pitch and is feeling confident, though she has some minor doubts. She is surprised that the CEO allows his team to keep their PCs open during presentations. A couple of the attendees must have urgent messages that they have to answer. Though it has to be said that it looks like a travel website, the one that she can see in the mirror behind the VP of International Operations, Clara Schmidt.

And by coincidence it is Clara who decides to interrupt Heidi’s flow.

 

So, what does Clara have to say?

“Heidi, these are great scorecards. Thank you for doing all that great work.”

The look on Clara’s face does not reassure Heidi.

Clara continues. “I have been in seven different countries since the launch and I already know what we need to improve. I think everyone in the room already knows.”

Heidi wishes the floor would swallow her

Clara persists. “It’s simply that our customers don’t know that our platform exists. This is what I was talking about just before you came into the room. The full team agrees, and we have decided to spend $20 million on a campaign to promote awareness.”

Heidi starts to wonder why she – Heidi Gudrun Schmidt, beloved daughter of Ernst Friedelin Schmidt and Eva Maria Schmidt (née Catolini) – even exists.

More Clara: “Let’s stop the presentation here and move on to the next item. Heidi, thank you for your efforts today. Let’s talk again six months from now when your next scorecards are ready.”

Most of the others in the room nod their heads, agreeing with Clara.

Peter, the CEO, also agrees. “Yes, great work Heidi! We look forward to your next report. Now let’s move on to discuss the employee picnic.”

Yikes! Trying to smile, indeed, trying not to scream, Heidi picks up her papers and leaves the room.

 What did the e-banking customers really want?

The answer to that question is on the next slide, the one that Heidi never gets to show.

Her scorecards are all about contact center performance, turnaround time on support emails, software download failures, and an extensive series on the survey methodology. Customers provided ratings and answered an open question on what should be improved. The top two customer improvement requests were somewhat related to each other.

Here is what Heidi’s text analytics software found across 20 countries and 11 languages, in priority sequence:

  • Customers in Brazil, Argentina, the Philippines, Poland, Hungary, the Czech Republic, and Slovakia all have major concerns about the security of their accounts. They are convinced that their data is not secure and are reluctant to transact online. Customers in each country mention TV documentaries and news items about e-banking systems being hacked. None of the comments suggest that their own accounts had been breached.
  • More generally, and in every country, customers who replace their mobile phones discover that it is impossible to migrate the two-factor authentication app to their new phones. They have to rely on text messages for this process. Over a hundred customers say they are moving their accounts to competitors because of this flaw.
  • Customers in all countries report occasional logon issues. Heidi has been able to trace a number of these back to the root causes.
  • Customers provided a consistent set of improvement suggestions for the layout of the screens and printed reports. These suggestions are mainly to make them simpler, reducing clutter.

Of course, none of these points have anything to do with Clara’s input during Heidi’s presentation.

 

An entirely predictable communication disaster

We humans like to think we are rational. We like to think that we will take the time to understand what is happening, to carefully consider choices, and to decide. However, our brains do not work that way. As behavioral economics expert Dan Ariely puts it, we are “predictably irrational.”

The best way to describe our modes of thinking is in terms of what Nobel-winner Daniel Kahneman calls ‘System 1 and System 2’.

  • System 1 is our intuitive way of thinking. We recognize patterns and jump to conclusions based on what we think we see. System 1 acts quickly. It was essential to early humans, so that they could react speedily to threats and so survive.
  • System 2 is our rational thought mode. It considers all available information, weighs it, and draws a conclusion. System 2 is much slower than System 1. Primitive humans did not need to analyze precisely which species of panther was staring at them. They just needed to flee. System 1 was there for that.
  • The most important point in Kahneman’s research and writing is that once System 1 has jumped to its conclusion, System 2 does not engage at all. System 2 is effortful and we, alas, are lazy.

Relevance to Heidi and to all customer experience professionals

Heidi, like most of us, most of the time, gave a pure System 2 presentation. She planned to do her big reveal after 35 minutes. Meanwhile, humans being human, her audience had decided the CX priorities after less than one minute.

Every further minute that Heidi spent without engaging their System 1 thinking just made things worse. Her audience locked their System 1 thoughts down, making them permanent.

We have seen this same behavior thousands of times. Indeed, we have made the same mistake ourselves over and over.

We mainly come from analytical or scientific backgrounds. We believe that our entirely rational arguments will win the day.

We have been so wrong.

 

The fix

You must hijack your audience’s System 1 from the start.

You want to persuade them to act in a particular way. You can’t achieve that goal unless you make it easy. System 1 is easy, System 2 is work.

If necessary, back up your intuitive, emotion-driven lead with data, when they are listening. Your job at that point is to persuade them to engage their System 2. Do it gently.

In Heidi’s case, an ideal opening to her presentation might have been a string of subtitled video clips or screen captures. They would be from the TV documentaries which had convinced many that e-banking was not secure and that phishing attacks were a real risk.

Heidi could have followed with a slide showing what happens when customers try to migrate the bank’s authentication app to a new phone.

An alternative to either of these would be a custom video featuring real customers talking about these two problems.

In our experience, getting the customer-centric perspective across to an audience visually, and as early as possible, always works. The reason is simple. Even if it shows the views of just a single customer, it is almost impossible for anyone in the room to say it should be ignored. They would seem stupid, or at least insensitive in doing so.

 

Conclusion

The key is to take control of System 1. Provide the conclusion you want people to jump to as quickly as you can. State it before your first content slide, if possible.

Don’t be crushed Heidi. Be conquering Heidi.

We will have a lot more to say about this topic in future articles.

ABOUT INSIGHTS FROM OCX COGNITION

OCX Cognition delivers the future of NPS. We ensure customer experience success by combining technology and data science with programmatic consulting. In our Insights section, we present a comprehensive and evolving collection of resources based on our research and expertise, collected for CX leaders committed to delivering business outcomes.

Human Cognition – Use loss aversion for effective CX communication

Human Cognition – Use loss aversion for effective CX communication

INSIGHTS
Human Cognition – Use loss aversion for effective CX communication
BRIEF

Human Cognition – Use Loss Aversion
for Effective CX Communication

We humans are highly averse to perceived loss. Use this when communicating.

Classical economic theory proved wrong

Many people on your teams and ours have studied economics. Classical macro- and micro-economics courses are full of graphs that purport to show trade-offs. Trade-off between price and quantity is one example. Trade-off between salary and vacation time is another.

Classical textbooks start from the basis that humans are rational economic actors. Those books are wrong.

The emergence of that combination of psychology and economics that came to be known as behavioral economics was a pivotal moment. Kahneman, Tversky and similar thinkers demonstrated that human cognition works in ways that are far less rational than those shown in economics textbooks.

It soon emerged that loss aversion is one of the most powerful psychological motivators in the economic sphere.

You are far more motivated to do the fire-fighting than the rest.

Experiments

We love the experiments that show the power of loss aversion. They are highly relevant to CX communication, whether internally or with customers.

Think about this simple experiment that was done with a large set of oncologists. The question asked was how willing they would be to prescribe a new medicine. The descriptions provided were identical except for one sentence. Half the doctors were told that the expected first-year survival rate was 90%. The other half were told that the first-year mortality rate was 10%. This is identical information, framed differently.

What happened? 80% of the first group said they would be willing to prescribe the new medicine. Only half the second group would. The only experimental manipulation was that one group was told about a potential gain, the other about a potential loss. That’s loss aversion in action. A negative like this is usually much more powerful at driving behavior.

Another simple experiment has been repeated dozens of times. Half of a university class is given coffee mugs with the logo of the university. They are then given a form asking at what price they would be willing to sell their mugs. The other half of the class gets to inspect the mugs. On a form they indicate at what price they might be willing to buy one of the mugs.

Time after time, the result of the experiment is the same: the sellers want twice as much as the buyers will pay. The sellers have the mugs. Because they have them, they mentally assign a higher value to them. They are less willing to give them up than buyers are willing to acquire them. Another example of loss aversion.

The value to your company of gaining a customer and of losing a customer of the same size should be equal. Rationally, it is equal. In our minds this is not at all the case.

Use this when communicating

Today you have acquired customer X, worth $500k. But today you have also lost customer Y, worth $500k. Are you happy or sad?

Personal relationships aside and all other things being equal, the dollars say you should just shrug and move on. But if you are a typical human, you’re not happy. Today is more about losing Y than gaining X.

The value to your company of gaining a customer and of losing a customer of the same size should be equal. Rationally, it is equal. In our minds this is not at all the case. Your colleagues, and indeed you yourself, are far more attached to the customer you already have than the customer you could have.

Extending the coffee mug example, you should expect your leadership team to be willing to invest (against financial logic) at least twice as much to keep an existing customer as to acquire a new, identical customer. Even as you read this you may be saying “Of course! That’s obvious!” to yourself. It may be obvious, but how often is it rational?

 

This is one of the NPS challenges

In our experience of involvement in over one thousand corporate CX initiatives we have seen this phenomenon again and again. We are confident that you have seen it too, whether you use NPS, CSAT or some other measurement and improvement system.

Your leadership, and perhaps you personally, are far more motivated to do the fire-fighting to recover Detractors than to commit the possibly much lower effort and investment to increase the number of Promoters. And remember, Promoters are the people who will both spend more and spread the word about how great you are.

It makes no sense at a rational level, and it is a huge communication challenge. Any discussion you launch about increasing the proportion of Promoters may get side-tracked as soon as you mention a customer who is having a major problem.

We have only found one foolproof solution. You may not like it.

 

Don’t mix the discussions

The only way to avoid a CX presentation or investment decision deteriorating into a pure fire-fighting discussion is to avoid discussing the two categories of customers at the same time.

Present your insights about what improvements are needed to motivate Passives to become Promoters this month. You can use loss aversion. Use it only when discussing the associated risk of Promoters becoming Passives if you do not make the proposed investments while your competitors do so.

Next month you can have an entirely separate discussion about Detractors and how to recover them. Let your leadership team’s and your own loss-aversion tendencies run wild at that point.

But do it now! Don’t miss this opportunity!

ABOUT INSIGHTS FROM OCX COGNITION

OCX Cognition delivers the future of NPS. We ensure customer experience success by combining technology and data science with programmatic consulting. In our Insights section, we present a comprehensive and evolving collection of resources based on our research and expertise, collected for CX leaders committed to delivering business outcomes.

As the Saying Goes, There Are Lies, Damn Lies, and CX Data

As the Saying Goes, There Are Lies, Damn Lies, and CX Data

INSIGHTS
As the Saying Goes, There Are Lies, Damn Lies, and CX Data
INSIGHTS

As the Saying Goes, There Are Lies,
Damn Lies, and CX Data

Persuasion and the presentation of CX data

“Hard to port, hard to port now!”

Neutral does not exist. Context, also called ‘framing’, always biases our reception in one direction or another. To stretch a point, “Hard left, hard left now!” means different things in a street demo or in the wheelhouse of the Titanic.

Whether implementing a CX initiative or explaining CX data, always bear context in mind. We offer some instructive examples below.

 

Homicides committed by mentally ill patients not taking their meds!

“Approximately 1,000 homicides a year are committed nationwide by seriously mentally ill individuals who are not taking their medication!” In the USA, that is.

That’s a powerful statement. Should we panic?

This is a different framing of exactly the same data: The annual probability of a given person being killed by a mentally ill patient not taking their medication is 0.0000036.

Pale consolation, but you are much more likely to drown.

The initial quote is a great example of how to manipulate us into thinking in a particular way. It comes from a paper by Torrey and Zdanowicz written in 1998.

Note how the quote uses an absolute number. If you want folks to act, use numbers. If you don’t want them to act, use a probability or a percentage.

There is an important message for CX professionals. The way that you present data can greatly alter your audience’s willingness to act. Present for the result that you need.

if you want folks to act, use numbers. If you don’t want them to act, use a probability or a percentage.

Can numbers have emotions?

We increasingly see automated road signs displaying the speed at which you are driving. The earliest versions just displayed numbers. They were somewhat effective, though they occasionally had a sort of perverse result. A small fraction of drivers used them to see how fast they could go on that stretch of road. Far more commonly, drivers sped up if they were well below the limit.

Progressive authorities have replaced these signs with ones that change color and display a happy face if you are under the limit. You see a red and unhappy face if you are driving too fast. (Our entire team deny ever having seen such an unhappy face while driving, so all of this could just be a rumor.)

The new signs are far more effective in reducing average speeds. Why? Data shows that it is primarily the expression of a human emotion that is the nudge we need. We want to make the face smile.

CX professionals may want to experiment with this effect in other contexts. In moderation, please!

Q: What is a good NPS number?
A: A better number than you had last time

Cognitive Dissonance – Too much red will kill your message

It is very tempting to set absolute standards for all your CX and operational metrics. Average time to respond to a call should be under 12 seconds. Product delivery time should be under three days. NPS should be at least 55. Error rates for your orders should be under 1.2%. And so on.

It seems rational to have rock-solid targets, and particularly so if they are based on competitive data. However, this type of goaling presents major communication challenges.

One way of thinking about the CX goal of any company is that it should be continuous improvement, whether measured financially, operationally, or in terms of customer or employee happiness. This means that the answer to the common question, “What is a good NPS number?” would be “A better number than you had last time.”

In this spirit, we recommend that evaluation and presentation of scorecards be about progress, not absolute numbers. If products, services, projects or brands are being compared in a performance table, focus more on relative performance rather than always against a specific goal.

We have a reason for taking this position: the well established phenomenon of Cognitive Dissonance. When we get new information that differs from what we already believe, we have a choice. We change our minds, or we reject the new evidence. We have a strong tendency to hold on to what we believe.

So if you show a scorecard that is full of unexpected red numbers (or indeed of unhappy faces), prepare for it to be ignored. In such a context, showing performance as relative will cause less dissonance, be more convincing, and work far better as a motivator.

Consider the story of Pedro, the head of Patient Experience at a large and successful private hospital near Houston. He is new and has to make his first presentation to the leadership team. He has gathered operational and satisfaction data from various departments.

Pedro can choose at least the two ways of looking at waiting times in the hospital emergency room, as shown below:

Which should he choose? It would be nice to think that the people receiving the left-hand table would react maturely. Unlikely.

Cognitive dissonance kicks in. The leadership team consider themselves highly successful. Their brains delete contrary information. For the ER data on the left, their reaction is to think, “There is so much red on this table that there is clearly something wrong with it.”

Not so when presented with the table on the right. It is easy to see that the performance on Sundays is awful, in relative terms. There is no implication that the whole service, and by logic the whole leadership team, is awful.

The table on the right should lead to a meaningful discussion about weekend staffing levels. At the very least there will be positive engagement on the topic of waiting times.

 

Conclusion

These are three examples of presentation techniques that will stimulate action. Or not – you do not always want action to be taken!

Use these cognitive techniques selectively. Employ them for the few items where you really want your audience to act.

ABOUT INSIGHTS FROM OCX COGNITION

OCX Cognition delivers the future of NPS. We ensure customer experience success by combining technology and data science with programmatic consulting. In our Insights section, we present a comprehensive and evolving collection of resources based on our research and expertise, collected for CX leaders committed to delivering business outcomes.